Dutch brewing giant Heineken is set to increase its shareholding in United Breweries Ltd, the publicly listed Bengaluru-based company once headed by fugitive Indian tycoon Vijay Mallya.
Heineken is already the single-largest shareholder of United Breweries, which makes the Kingfisher brand of beer, with a stake of over 46%. It had raised its holding in the company two years ago by purchasing an additional 2.8% stake for Rs 1,007 crore (around $146 million then). It has now sought regulatory approval to hike its holding.
Mallya and his group firms own a stake of around 11% in United Breweries, but a bulk of this is pledged with lenders.
Two years ago, too, Heineken had bought a part of the group’s stake pledged with the Enforcement Directorate, a federal agency that investigates financial crimes.
Mallya left India for London in March 2016, shortly after lenders to his defunct Kingfisher Airlines declared him a wilful defaulter.
Last week, the Businessline newspaper reported citing unnamed sources that the Dutch beer giant had told Indian agencies it was willing to buy the shares of Mallya as and when the courts allow the lenders to sell them.
The report added that Heineken would initially buy a small stake to take its holding to over 50% and later buy more shares.
Heineken would need to shell out over Rs 1,200 crore ($175 million) to gain a majority stake in the Indian company, as per estimates by The Capital Quest.
Heineken has been aggressively looking to expand inorganically. Last month, it approached South Africa’s Distell Group Holdings Ltd to acquire most of its business.
Stellenbosch-based Distell is one of the largest South African alcohol makers with brands like Amarula, Bernini and Hunter’s. It had revenue of ZAR22.4 billion ($1.5 billion) for the year ended June 2020. It commands a market capitalization of $2.2 billion.